Financial Daily from THE HINDU group of publications
Thursday, Dec 01, 2005
Financial Daily from THE HINDU group of publications Thursday, Dec 01, 2005 |
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Markets
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Regulatory Bodies & Rulings SEBI slaps fine on JMP Securities Our Bureau
Mumbai , Nov. 30 THE Securities and Exchange Board of India (SEBI) today slapped a penalty of Rs 1 lakh on JMP Securities Pvt Ltd, a Bombay Stock Exchange member, for committing "irregularities" in the trading of Global Telesystems Ltd (GTL) stock in September 2003. The SEBI order, passed by Mr D. Sura Reddy, the adjudicator for the case, said it found JMP Securities violating the various provisions of Prohibition of Fraudulent and Unfair Trade Practices (FUTP Regulations 2003) and SEBI Stock Brokers and Sub-Brokers Regulations, 1992, while dealing with the GTL scrip. The investigation revealed that during September 2003, JMP had entered into self-trades of about 8.45 lakh shares of GTL. Of these, 4,23,970 shares were fictitious in nature as the buy and sell client codes were the same, the order said. These trades were done for its four clients. The SEBI order said it was found that during the period from September 1, 2003 to October 8, 2003, four jobbers of JMP had done eight trades with their respective clients and reversed orders on the same day for the same quantity with the same clients. These trades were spread over four different days for 7,88,830 shares and accounted for 1.68 per cent of the total market volume of 4,70,81,353 on the BSE during that period. It was also found that the eight trades individually accounted for 3.4 per cent to 8.9 per cent of the market volume of the respective days. Out of these eight trades (50,000 shares each) seven were reversed at a loss in the range of Re 1 to Rs 2.50 a share and one trade was reversed at a profit of Rs 0.90 per share. It was alleged that the transactions of jobbers of JMP were done in a synchronised manner by reversing with the same clients, who were known to JMP, were not genuine jobbing transactions. The SEBI has asked JMP to pay the penalty within 45 days.
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